No Case Against Cancelling Student Loan Debt
Whenever someone brings up student loan debt cancellation, someone else says, “We made sure our kid didn’t have student loan debt, so why should we, the taxpayer, shoulder your loan debt?”
First, debtors also pay taxes, so the binary between debtors and tax payers is false. Second, liberating 42 million Americans (about 13% of the population) from debt burdens would improve the general economic well-being of the country, and that would benefit those who do not have outstanding debt as well. 42 million people would have more money in their pockets, which might go toward health insurance, better quality food, rent payments, and other necessities. It would stimulate the economy more than any round of isolated government checks.
Ben Ritz argues in Forbes that Sens. Warren and Schumer’s plan to forgive $50K in student loan debt is irresponsible, as it also erases the debts of well-off graduate students who probably don’t need the assistance. He writes,
Approximately 48 percent of the outstanding student loans are held by people with graduate degrees, which is twice the share of loans held by those who earned an Associates’ degree or less. In fact, more than a third of student loan debt is concentrated among households with annual incomes over $97,000. Absent better targeting, broad debt relieved would mostly benefit high-income households that already have the ability to pay off their debts.
Most student loan debt is from graduate students. If you have the money to go to graduate school in the first place then you’re not the kind of person who needs government relief (i.e. you’re financially privileged). Therefore, according to Ritz, forgiving your debt would be regressive, since you’re relatively wealthy already.
Ritz’s argument is misleading. Plenty of people go to graduate school because they are trying to join the well-to-do, not because they come from them. Why would people be in such extreme debt if they had the ability to pay it off in the first place? I graduated college in 2012 with $27K in debt. Thanks to grad school I have roughly $120K in debt accrued as of 2021. I do not come from a financially privileged family: my father was disabled, and my mother had to take care of him and two kids. I do not come from money; that’s why I had to go into debt to go to college and grad school. If Biden caves to Warren and Schumer’s call for $50K of relief, I am still $70K in debt (yes, I learned math in college).
I am hardly the worst case. As Travis Hornsby points out, many who face crushing loan debt are medical workers, who may bear over $300K in student loan debt. That debt contributes toward a higher suicide rate among professionals. Imagine a friend telling you they were having suicidal thoughts because of their student loan debt. Can you imagine telling them, “well, if you’re privileged enough to have these debts, you’re privileged enough to get out of them?” Is that how any decent person would respond? These people are not postmodernist literati writing impenetrable philosophy; most of them are the kind of necessary professional work that we tend to take for granted: physicians, dentists, etc. Especially in a pandemic, relieving people of the debt accrued to get that kind of education is not irresponsible, it is the baseline of responsibility. $50K of loan forgiveness out of $300K of debt is like being thrown paper towels after a hurricane. It should not even be considered the low end of loan forgiveness, much less the high end.
Who actually collects the money from student loan debt payments? The answer is the federal government. Conservatives ought to be outraged by the government shackling people with debt as a punishment for pursuing education. Moreover, let’s not forget how the 1% avoid paying nearly any taxes by stashing their money away in tax havens, and how they were bailed out on the public’s dollar in 2008. In a more sensible world, progressives and conservatives might come together in opposition to this unjust government practice. It is difficult to see how the institution of student loan debt is more than just an elaborate scheme of economic repression.
A 2010 report from the Goldwater Foundation (no left wing thought collective but a conservative-libertarian research institute) shows that “administrative bloat” is the leading cause of the tuition hikes we’ve seen over the last few decades.
Universities actually have more full-time employees devoted to administration than to instruction, research and service combined. In 1993, these leading universities were flush with administrators, employing 6.8 full- time administrators for every 100 students compared with 6 full- time employees engaged in instruction, research or service. By 2007, there were 9.4 full-time administrators per 100 students compared with 7 full-time instructors, researchers and service providers.
The president of my university would have collected a $200K bonus last April, but turned it down in recognition of the COVID pandemic. Pandemic aside, why is the university administration glutting itself when the blood of higher education–students and faculty–is being sucked dry of all funding? The student loan debt crisis is not new; it did not show up with COVID.
Everyone seems to be in agreement on one thing: the entire student loan system is broken. The only real solution is free public higher education, as offered in every other industrial or post industrial country in the world. The United States is the wealthiest country in history by a considerable margin! There is no fiscal reason we cannot provide free public education (and free healthcare) to all of our people, coupled with 100% loan cancellation for all those who have already borrowed. The only barriers are political, and those may be overcome with sufficient effort, organization, time, and critical thought.
Charles Wofford is pursuing a PhD in historical musicology at the University of Colorado at Boulder.
